20.5.2019 - Comments Off on How we built a VC Fund called Nation1
We guarantee you won’t see this happening very often; we started a VC (Venture Capital) fund and stepped out of it before launching it, bringing in a new team which was a better fit…
You may remember that we have said many times that we believe women are the next big thing in tech. Somewhere around the time we started talking about it (reminder: it was the second half of 2016) a chance appeared to receive substantial LP (Limited Partner) funding from EIF (European Investment Fund). This possibility was available for newly established VC funds with new teams in the Czech Republic.
Wow! We were enthusiastic; we thought: “let’s answer this call and talk with professionals about how we can support female entrepreneurs community in Europe”.
We started working on the fund in early 2017 and it was like entering new muddy waters, nothing went easy, but we had enthusiasm and vision why we are doing it. No one from us have ever worked in venture capital (VC) or private equity (PE). We may have provided some funds as LPs (Limited Partners) but we knew very little about the process, people and mechanics of traditional venture capital business. So we called all friends and friends-of-friends working in the space. We gathered some insights, some standard ways of doing things and got a huge pile of advice to follow.
We didn't like most of it so we thought we’ll do it our own way, but it did not resonate well with EIF as a major investor. Focus only on female entrepreneurs or mixed teams — not a good idea; focus on student idea stage projects with high number of small(er) investments — not a good idea; work with several technical and science focused universities to cover their student projects — not a good idea…
And so even though our fund was getting closer to becoming a reality in early 2018 we had to reassess our reasons, why we started this and we had to think about the possibilities how to progress further. It was there when we decided this case is not for us.
We started looking for new team members so we could step out. We stepped out of the fund work at the second half of 2018 to allow new members of the team to settle in.
Why we did that?
Well, for starters we saw that with this fund and with EIF as a major LP investor we can’t focus on our original mission — support of female entrepreneurs in Europe. Then the condition of “regional investment focus = Czech Republic” which we hoped would not be as strict as it proved to be, was kind of a show stopper. For us having singular investment focus on the Czech Republic seemed extremely limiting. Just remember, you have to compare what we say here with our initial idea/vision to improve support for female entrepreneurs in Europe. It’s not necessarily a bad thing to focus on one country, for most people it would actually be a good one, but not for us.
Great news is that even though we let someone else finish the job we started the early stage venture capital fund called Nation1 which is becoming investment-ready and operational these days.
As I mentioned, it has a completely new team inside except the one person. That one person is actually the only woman in the fund’s team, Petra. We hired initially Petra to help us build female entrepreneurs community and female entrepreneurs deal-flow from across Europe as the first step towards our planned wFund.vc. Petra was always interested in young projects and acceleration of their potential and as a new mother, she’s also heavily vested in the Czech Republic. That’s why we are glad we were able to persuade her to stay with the Nation 1 fund and increase her involvement to a partner level that the fund would become her baby too.
In case you guys and girls reading this are from the Czech Republic or you think you’d consider relocating substantial part of your economic activity (e.g. IT development) there and you are looking for early-stage funding, then you have one fresh team motivated to improve early-stage funding for promising projects: Nation1 VC. Reach out to them!
We wish them tons of promising projects to choose from and the guts to choose successful misfits!
Wanna know what's happening when it's happening? Subscribe to our 42Newsletter to get notified automatically when we publish the next Journal entry...